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Reciprocity with Wisconsin

The deadline to come to a decision on reciprocity with Wisconsin passed in October so there will not be reciprocity in 2012 or 2013. The reciprocity agreement with Wisconsin ended January 1, 2010 and lawmakers will have until October of 2013 to come to an agreement that will reinstate it for 2014. In the meantime the lack of reciprocity agreement means that any Minnesota citizens working in Wisconsin must withhold WI withholding tax and report their Wisconsin income on a WI nonresident tax form. Similarly, any WI residents working in Minnesota must withhold MN withholding tax and report MN income on a nonresident tax form. Wages for these purposes include personal service income, such as, salaries, wages, commissions, and fees. A possible silver lining is that you can qualify for tax credits on your state form for taxes paid to other states. For those of you that own a business and you transact that business in both Minnesota and Wisconsin, make sure to keep good records and consult with your tax professional about the compliance and liability of doing business in multiple states. As always, we are here to help you with any questions you might have.

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